How to budget for Christmas

There’s the pressure to attend office parties and social events, the expectation of unlimited presents, food and alcohol, and images of the “perfect Christmas” every time you turn the television on.

No wonder, then, that so many of us end up feel stressed and financially under pressure at a time when we feel we should be enjoying ourselves. Even with the best intentions, it is easy to overspend and end up worried about going into the red in January. So here’s our guide to staying financially afloat at the most expensive time of the year:

Try to have a list of all the people you’ll need to buy gifts for, and an estimate of what you plan to spend. When you see the list in black and white it might demonstrate that you need to cut back a bit on your plans to avoid being out of pocket.

When you’ve decided whom you are going to buy for and what you might get them, try to stick to the list. Otherwise, you’ll find it very easy to blow your budget.

Read more: Homemade Christmas gifts that people actually want

You don’t always have to pay full price for the goods and services you want.

Remember to use the points you’ve built up on your loyalty cards throughout the year, seek out ‘three for two’ special offers, and have a look at voucher codes websites for special offers, including discounts and free delivery deals.

If possible, do all your shopping with cash. This will help you keep within a budget and stop you overspending.

If you do need to manage your cash flow in December and January then make sure you do so with the right type of credit card.

Don’t be pressurised into signing up for a store card for a small discount only to find that in January you are paying interest of up to 30 per cent on outstanding balances. That will more than outweigh any savings you made at the time of purchase.

A better option is either a credit card with a long interest-free period for purchases, or a balance transfer card onto which you can move existing debt. Make sure you have a plan for paying off the balance on your card.

Read more: What type of credit card should you use?

If you are planning to use your bank overdraft to help you manage your Christmas spending, then make sure you’ve arranged it in advance.

Unauthorised overdrafts are very expensive and the costs soon mount up.

Shopping around online is often the best place to find presents cheaply.

It’s best to think about this at the beginning of December, as you need to factor in delivery times and the potential extra cost of having to pay for next day delivery.

Many shops enable you to buy online and collect them at your local store or collection point via Click and Collect. This reduces delivery costs.

You can use a web comparison site such as Price Spy to find the cheapest deals as well as Pricerunner and Kelkoo.

You may need to return or exchange goods, so keep your receipts somewhere safe.

Many shops try to entice customers in with sales which may not offer quite the discounts they promise.

Sometimes you’d still be able to find the goods cheaper elsewhere, at a non-sale price. It’s a good idea to shop around first.

Avoiding the “sales frenzy” also means you can shop when it is quieter so you have space to browse and don’t get carried away by the atmosphere.

You could consider cheaper supermarkets for fruit, vegetables and non-branded essentials.

Don’t forget when you are budgeting that you will still need to pay bills and household expenses in January. Be realistic with your food shopping—you don’t need as much as you think.

If you start using overdrafts, personal or payday loans, or credit cards to pay for essentials like food and rent, then you should consider getting debt advice from a free debt counselling service like National Debtline.

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